Philippine Treasurer Lauds Savings on $1.46 Billion Debt Buyback

The Asian nation expects to cut annual interest costs by $53 million through repurchasing dollar- and euro-denominated bonds due mostly from 2014 to 2016, de Leon said in a phone interview today. The government will fund the repurchase with proceeds from an overseas sale this month of $750 million worth of 10-year peso-denominated bonds and with dollars bought from the central bank, she said.

The buyback and peso bond sale let the government "manage its external liabilities through the redenomination of a portion of the external debt into the local currency," Finance Secretary Cesar Purisima said in a statement today.

"The exercise will also reduce interest costs, avoid bunching up of maturities, and extend the duration profile," de Leon said in the statement.

The $225 billion Philippine economy is reducing its budget deficit, extending debt maturity and cutting foreign-currency risks in pursuit of an investment-grade credit rating. President Benigno Aquino's administration has conducted bond exchanges, debt repurchases and peso-bond sales to overseas investors since starting a six-year term in June 2010.

About $3.8 billion of bonds qualified for repurchase were offered by investors, de Leon said. The $1.46 billion buyback cost includes accrued interest on top of the bonds' original price of $1.2 billion. Last year, the Philippines spent $1.7 billion buying back $1.3 billion worth of debt.

Record Dollar Reserves

Bangko Sentral ng Pilipinas also stands to gain from the government's plan to buy dollars from the nation's reserves, de Leon said. The Philippines' international reserves climbed to a record $82.09 billion in October after the peso rose 1.3 percent against the dollar that month.

The local currency appreciated to 41.05 per dollar on Nov. 8, its strongest level since March 2008. It fell 0.2 percent yesterday to 41.335.

The Philippines' debt rating was raised to Ba1, one step below investment grade, by Moody's Investors Service last month, putting it on par with assessments by Standard & Poor's and Fitch Ratings.

About
Webber

I am among of the writers and administrators of this web site. I always on the heads up when it comes to Sports, Politics, Economy, Business, Physics, Mathematics, Technology, computers and NEWS all over the world that triggers ny eyes and interests. I am working as a volunteer with other 14 administrators, researchers, writers and contributors. We are a strong solid team. Join us and be among of the contributor with your name on each posted article.

RELATED POSTS

YOU MAY LIKE TO READ

LEARN FOREX TRADING AND GET RICH

Live trading with Bitcoin through ETORO Trading platform would allow you to grow your $100 to $1,000 Dollars or more in just a day. Just learn how to trade and enjoy the windfall of profits. Take note, Bitcoin is more expensive than Gold now.

For outside the Philippines customers may buy Bitcoins online atCoinbase.com

Happy 9th Year Anniversary "PESORESERVE.COM"

Founded on June 22, 2009 as "Rebuilding for a Better Philippines" aimed to educate the Filipinos how to love our country, how we lost Sabah North Borneo, and reinvigorating the burning heart of our Kababayans and fellow OFWs to love our "Bayan" our country; now we are at our 9th year of existence..